1. S&P rally has been resilient and shown very little deterioration, even in the wake of the Belgian terror attack, where futures dropped 0.50%, but have since rallied back off early lows. There has been some evidence of the McClellan Oscillator beginning to drop off, after breadth hit very high levels, which was also seen in the Percentage of stocks trading above their 50-day moving average, which got up to near levels seen right after the initial breadth surge off the 2009 lows for NY Composite and is also turning down, while the Total Put/call ratio dropped to new six month lows yesterday, which historically has been followed by sub-par performance in stocks in the immediate weeks ahead. However, it remains necessary to await some evidence of a trend reversal to fade this uptrend, which initially would take a close back down under 2023. Upside targets above 2045 lie up near 2055-6 and 2060-2, which still can't be ruled out.

2. Industrials strength remains impressive, and a key driver near-term with XLI having broken out to new monthly highs while having showed relative strength breakouts vs SPX, while the WTI Crude rally has helped Energy outperform, while many Materials stock have grown stretched of late and underperformed in the last couple days with the US Dollar having stabilized a bit from its recent decline.

3. A few signs of Treasury yields turning higher yesterday after the last week of moving in the exact opposite direction of SPX, while Bund yields also stabilized, but both of these moves are being erased this morning with the Terror attack causing a flight to safety. Key for US 10yr Treasury yields will be 1.85% and remaining over this level gives Yields a chance to move up over 2% in the weeks ahead. A break of 1.85 would likely coincide with equities following suit.

4. WTI Crude has gotten very stretched of late, and some first evidence of negative momentum divergence here, as RSI shows momentum not following price on this recent spike above $41 in recent days. Fornow though, still no meaningful trend reversal here, and a move to new multi-day lows will be important in suggesting a trend reversal. Prices this morning are trading lower by nearly 1% after WTI reached 41.71 in early Futures trading, and this will be something to pay attention to, given the recent correlation.

BOTTOM LINE- A few warning signs of extreme breadth readings and overbought conditions and some minor stalling out, yet still no material weakness that has violated uptrends, and a close down under the 10-day ma is necessary at this point to expect a pullback, currently at 2023 for June futures. Overall, an amazing amount of near-term resilience in the market, with the S&P up over 13% from mid-February intraday lows while Emerging markets, Crude and Gold have all outperformed. Just in the last few trading days many market timers have "come of the the woodwork" to suggest fading the rally based on things like Low Put/call ratio, or overbought conditions, or a slowing in breadth from extremes, which are all accurate, but yet have yet to produce even a minor downdraft. Potentially this could be changing with today's weakness, but yet a close down under the 10-day moving average will be more important than just intraday weakness. We've seen sectors like Industrials start to gain more momentum, with XLI having surpassed prior highs and making relative breakouts to SPX, while healthcare has started to stabilize a bit, if the price action in GILD, MNK, ILMN, BIIB is any guide. Bond yields meanwhile have begun to rebound in the US while showing some definite signs of stabilization in Europe after the severe pullback, and Bund yields in particular should be watched for signs of turning back higher. The ongoing rise in WTI Crude oil continues to be something which needs to be watched daily given the strong correlation with US Stocks of late, with many suggesting here as well that the rally isn't backed by fundamentals and should soon stall out and reverse course. In the days ahead, the Industrials rally still looks to have some "legs" given the recent surge in momentum,and if Yields begin to turn higher with any sort of quickness, this should aid the Financial sector as well, which would serve to prolong this rally longer than many might expect. For now, simply using a break of a simple 5 or 10-day ma in the SPX should be a good guide for any upcoming pullback. Until that happens, its proper to favor stocks within the Industrials and Financial sector which have begun to turn higher, along with various Healthcare names which are trying to rebound after recent weakness- BIIB, GILD, for example.

S&P still holding steady in its recent trend channel and will require at least some break to expect any drawdown.

Crude oil's rise has been similarly impressive, rising back up above former lows and breaking out above the downtrend since last Spring as well as from 2014 peaks. While overbought after its recent rally with momentum not following the recent push higher given its consolidation in the last week, gains still look likely with a move up to the low to mid-40's before any type reversal. OIH and XOP both look like attractive ways to play the WTI move in the short run.

The TNX chart held where it needed to structurally as of Monday's close, but has pulled back in the wake of the Belgian Terror attack early on Tuesday. Overall,, 1.85% is key to hold. Under would cause a more meaningful drawdown in Treasury yields. Meanwhile, over 1.91 should pave the way for a test and move back over 2.00%

Two straight days of Bund yields trying to stabilize while momentum has improved. Important that yields don't fall back under Monday's lows and until that happens, it looks likely that Bund yields can attempt to bounce.

The Dollar/Yen pattern has attempted to bounce in the last few days after bottoming near important support right near 111. Now will be key to retake these prior areas of former lows, shown at 112.20, 112.60. Until these are exceeded, this pullback in USD vs Yen is negative, and these areas should represent resistance.

One additional chart of S&P shown here on a daily basis to illustrate the ongoing uptrend, which includes early morning weakness on Tuesday. Thus far, there has been insufficient damage to think prices are going to break this trend, but important to watch carefully in the next few days given the presence of a few warning signs in momentum.

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